By Rob Cosman, Partner, Jones & Cosman Chartered Professional Accountants
Revenu Québec uses the word “spouse” often on its website and tax forms. This word refers to someone with whom you share a marriage or a civil union. However, in some cases, it may also refer to de-facto or common-law spouses. The exact definition of “spouse” for the purposes of taxation varies from program to program. It is important that you know how to navigate your tax return if you are in a common-law or de-facto relationship.
Marking Spouse on Your Return
The income tax return you submit to the Canada Revenue Agency has a box you can tick if you have a common-law or de-facto spouse, but unfortunately, the Revenu Québec return only has the option to mark “has a spouse” or “does not have a spouse.” If you are not married but have a common-law or de-facto spouse, you should tick the “has a spouse” box as long as you meet one of the following conditions:
- You and your partner live together in a conjugal relationship and share a child through biology or adoption.
- You and your partner have lived together in a conjugal relationship for at least 12 months.
If you broke up for less than 90 days, it does not constitute an interruption to the 12-month period, and you should use your situation on the last day of the tax year when making this determination.
For example, if you were living with a romantic partner with whom you share a child on Dec. 31, 2019, you should mark married on your return. However, if you lived with a partner for years but broke up in August of 2019, you are not considered to be married on your tax return, even though you were together most of the year.
Understanding the Benefits of Having a Spouse
If you have a de-facto partner and mark married on your return, you will have to take your partner’s income into account when calculating various credits or deductions. You will also need to note your partner’s date of birth, social insurance number and other details on your return. Fortunately, because you qualify as spouses under the tax code, you may transfer unused tax credits or income tax withholding between each other.
However, if you want to transfer retirement income between the two of you, you must qualify for additional criteria.
Looking at Alternative Rules for Pension Plans
For the purposes of tax deductions, credits and transfers related to the Québec Pension Plan, public-sector pension plans and supplemental pension plans, the Quebec government only recognizes de-facto partners or common-law spouses if you have lived together for at least three years.
To qualify as spouses, you must have been in a conjugal relationship for all of that period. For example, if you lived together as friends for two years and then became romantically involved for a year, you are not considered spouses. However, if you had been romantically or conjugally involved for the entire three years, you would be considered spouses.
There are different qualifying criteria for unmarried couples with children. Namely, if you have a biological child together, adopt a child together or are expecting a child together, you only have to live together for at least a year to be considered spouses for the purposes of pension plans.
For example, imagine you and your partner have been living together in a conjugal relationship for 18 months.
- If you don’t have a child together, you are not considered spouses.
- However, if you have a child together, you are considered spouses.
- After the three-year point, you are considered spouses, regardless of whether you share a child.
If you are married or in a civil union with another person, you are not considered the spouse of your common-law partner, regardless of whether you meet the other criteria. However, for the purposes of supplemental pension plans such as locked-in retirement accounts or life income funds, your common-law partner may be married or in a civil union with someone else.
Because of these differences, it is possible to mark that you have a spouse on your provincial return but not be able to transfer retirement income between each other.
Claiming Child Assistance Payments
For calculating child assistance payments or tax credits, the Québec government uses slightly different qualifying criteria than outlined above. In this case, you are considered spouses if you have been in a conjugal relationship together for at least 12 months. Alternatively, if your partner is the biological or adoptive parent of your child, you are considered spouses, regardless of how long you have lived together.
About Rob Cosman
Rob Cosman, is a Chartered Professional Accountant who runs his own accounting and tax practice with his wife in Toronto, Ontario. Beginning in 2000, Rob’s career spanned over Halifax, Cayman Islands and Toronto. Rob held senior industry positions including CFO roles in public and private industries ranging from telecommunications, retail sales, and consumer packaged goods.
Rob has over 10 years of tax experience and is the author of numerous articles. He has the ability to take complex tax situations, explain them in common sense terms and guide clients to make the best decisions based on their individual situations.
